In an IPO, NeoDiagnostic sold 10,000 shares for $35 each, but all the money except for $100,000 was subsequently spent on an R&D project. NeoDiagnostic Inc therefore currently has $100,000 cash on hand and, so far as investors know, no other assets. NeoDiagnostic announces that the R&D project yielded a newly obtained patent that the firm wants to exploit in a new manufacturing operation. NeoDiagnostic has determined that it will need to invest $525,000 to move into the manufacturing phase for its new product. It intends to raise some of the new funds it will need by borrowing $200,000 at an interest rate of 6% per annum. The debt will be retired in full at the conclusion of the project in 11 years from now. Assume that the corporate tax effect of debt approximates the overall effect of debt on firm market value. Remaining funds needed for the investment will be raised through a new equity issue